Franklin Templeton has launched Europe’s first blockchain-based government money fund in Luxembourg, utilizing the Stellar network. This move indicates a major step in the digitalization of traditional finance, offering institutional investors across eight European countries access to U.S. government securities. The fund named Franklin OnChain U.S. Government Money Fund, is a Luxembourg registered UCITS SICAV product.
The fund operates on the Stellar blockchain, which employs Franklin Templeton’s in-house blockchain-enabled transfer agency platform to enhance transparency and security for investors.
Investment Strategy
The primary goal is to provide high current income while preserving capital and maintaining liquidity, targeting a stable Net Asset Value (NAV) of $1 per share. To achieve this, the fund invests in U.S. government securities, including fixed-rate, floating-rate, and variable-rate securities, and may engage in repurchase agreements fully provided by U.S. government securities or cash.
Franklin Templeton’s Expansion and Growth
Franklin Templeton’s expansion also includes the deployment of its tokenized money fund, “Franklin OnChain U.S. Government Money Fund” (FOBXX), on Solana blockchain, marking its availability on eight different blockchains.
As of February 11, FOBXX had a market cap of $594 million, ranking as the third largest money fund with tokenized shares. The integration with Solana aims to boost the network’s tokenized money fund ecosystem.
Tokenized Money Fund Sector Growth
The tokenized money fund sector has experienced substantial growth, increasing by 415% in 2024 and reaching a market cap of nearly $4 billion by the end of the year. As of February, the market cap recorded has been $3.6 billion, four times larger than the previous year. Ethereum leads the market with over $2.4 billion in tokenized shares, followed by Stellar with nearly $380 billion.
Franklin Templeton’s initiative aligns with that of other big companies that are using multiple blockchains to turn real world assets into digital tokens. This market is growing at a fast pace with over $17 billion in tokenized assets.
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